Feb. 16, 2017, 11:34 a.m.
Talks of growth in Cambodia has made it a hot-spot for foreign property investment in the last few years, and the nation is receiving worldwide interest from property developers and investors.
Known for its beautiful culture, awe-inspiring beaches, mystical forests and rivers, and enormous temple complexes, it’s easy to understand why everyone wants a piece of it. But more than the aesthetic beauty of the country, there are a few other things that give Cambodia its property investment charm:
Cambodia has used the U.S. dollar as one of its main currencies for a long time now, over 20 years in fact. The government explains that the US$ provides stability in the market with ease of conversion from Riel (the local currency). This makes transactions less complicated for investors and offers a currency option that faces very few transfer restrictions around the world. There are no restrictions for exchanging US$, making it a highly-free flowing currency, and a global currency showing superior stability to all others over recent years. Transferring funds from abroad into Cambodia is very easy and able to be done with very little process. Meanwhile, when you resell your property in Cambodia, you can transfer your money outside of the country very easily, simply by showing your receipt of sale. Many regional banks that have opened in Cambodia also offer ample support for foreign investors who wish to enter the growing real estate market of Cambodia.
Even though the Cambodian real estate industry has come a long way in the preceding years, there is still a large chunk of undeveloped land and untapped districts able to be utilized by investors and developers from overseas. Most developments in recent years have focused on the capital Phnom Penh, the beach town of Sihanoukville and the tourist destination Siem Reap; but Cambodia still has huge potential for growth in other regions, and investors are welcome to join in when they bring FDI, infrastructural support and experience.
- U.S. Dollar Based Investment:
Research from a large variety of sources has demonstrated a consistent average GDP growth of 7 to 7.5 percent in the last 5 years for Cambodia. This has allowed the Kingdom to rank 21st in this measure of growth worldwide, and the 1st in the Southeast Asian region – further solidifying its integrity for potential growth into the future. While the bulk of this GDP has traditionally come from garment manufacturing, the economy is entering a phase of diversification and value-adding upskilling which is set to take the economy to a new level of sustainability, for both investors and Cambodian nationals. In fact, last year construction was the largest engine of GDP growth in Cambodia - a testament to the emergence of a booming real estate industry. Appreciation gains for Cambodian real estate are much more attractive than other established markets thanks to the nation’s consistently fast growing economy and GDP. Buyers of property in Phnom Penh, for instance, can safely expect 6 to 8 percent appreciation each year.
Development in policies regarding strata titles, whereby foreign investors can purchase co-ownership in a property as a workaround of the Cambodian State Constitution, has proven to be a profitable decision for its economy and a key for foreigners looking at entering the real estate market. Long term lease policies have likewise allowed huge opportunities for international investors to enter the market and these have provided security sufficient to encourage more and more inward investment.
- Impressive Growth in GDP:
Lying between equally competitive and growing neighbor countries, Cambodia is located alongside Thailand and Vietnam. Meanwhile, the economy sits between the two giants of China and India, with consistently growing partnerships with both. It has also joined ASEAN and has established highly beneficial trade agreements with Europe, North America and Australasia. Infrastructure and trade services have been one of the things Cambodia has pushed very hard on in recent years. That is why it has continued to build better roads, railways, bridges and deep sea ports. It has also continued to develop its international flight connections across the country so as to integrate fast transport and travel for investors. As part of China’s “One Belt One Road” policy, the country will also soon see interconnecting railways across the Asian region and into Europe.
- Strategic Trade Location and Logistical Integration:
The fact that the Kingdom has had one prime minister for almost a quarter century means that there has been, and will continue to be, consistency and continuity in its highly investor friendly policies and political practice. In fact, the current prime minister represents the longest-ruling non-royal leader in South East Asia. Out of the ASEAN nations, Cambodia has demonstrated itself to be within the top 3 in regards to political stability.
Cambodia boasts a low cost and high-standard of living for retirees; offering a great lifestyle at a fraction of what it would normally cost in other places in the region, and tiny compared to highly developed economies. This is what makes it a perfect retirement spot for foreigners. This is becoming increasingly so as the nation's logistical connections, health system, schools, visa support systems and infrastructure grows in leaps and bounds.
According to the Population Division of the United Nations’ Department of Economic and Social Affairs, Cambodia has about 15,700,000 people, and these people are the Kingdom’s greatest asset in terms of growth. They are not merely spectators to growth; they are the drivers of economic progress - given that 70% of this population is under 30 years of age! Aside from that, the people of Cambodia are also naturally friendly and welcoming, and most understand the value of partnering with internationals for benefits in terms of sharing worldly experience, education and economic benefits.
These are just some of the things that have given Cambodia its charm for investors in the last decade. And as more and more people see the great accomplishments in its past developments and its full potential beginning to emerge, it will soon grow even more attractive for property investment opportunities, whether at a personal or at a business scale.
Nevertheless, for the most appreciation, NOW is the time to consider investing in Cambodian real estate!